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(Reuters)   Cost of Greece exit from single currency: (⋰☹ ) one TRILLION Euros   (reuters.com) divider line 34
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2759 clicks; posted to Business » on 06 Mar 2012 at 8:25 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-03-06 08:32:17 AM
img546.imageshack.us

/oblig
 
2012-03-06 08:57:25 AM
These jackasses have painted themselves in an even smaller corner than usual with this. They have to scare the holdouts on the bond deal into line with reports like this, but don't seem to understand that some of the holdouts are never going to accept the deal. Therefore, if the deal falls through and Greece does default, we now have a nice, shiny detailed report showing exactly how farked everyone is. True or not, the markets will see this and promptly freak the hell out when the default hits. It probably doesn't matter anyway since a disorderly default would likely roil markets everywhere anyway, but nothing like putting it all on paper so we have a nice blueprint.

Also, here it is courtesy of Reuters:

Link (new window)
 
2012-03-06 10:00:30 AM
So, the bondholders are saying that the sky will fall if Greece doesn't honor its bonds. I am Jack's complete lack of surprise. God forbid someone lose money on a stupid investment.
 
2012-03-06 10:01:15 AM
This is going to keep going on until folks can't make money on it anymore. Then all of a sudden there will be a stunning agreement in the negotiations and the whole thing will clear up in about a week.
 
2012-03-06 10:06:20 AM
So what, that's like, $2 USD or something right? I can skip my latte one morning to keep getting Gyros for lunch.

/I keed.
 
2012-03-06 11:11:35 AM
OK so it's cheaper to bail them out than to let them exit the zone, what I want to know is what is going to happen to the rating agencies that originally gave these bonds a AAA rating?

Anyone?

/crickets
 
2012-03-06 12:26:37 PM
ummmm
but if you just kick greece out of the euro and stop using any more cash to bail greece, doesnt that free up TONS of cash to bail out italy, spain, portugal and ireland?

hmmmmmmmmmmmmmmmmmmmmmmmmm
how about one bailout per country?
kick them out when they come back for a second one?
TADA

problem solved
LOL
 
2012-03-06 12:28:27 PM
ooooooooooooooooooooooo
or dont give loans without collateral
 
2012-03-06 12:29:00 PM
Fist they manipulated and then bet against the homeowners.

Then they manipulated and bet against the banks.

Now they manipulate and bet against the countries.

Modern finance will be more destructive than a war before it is over.
 
2012-03-06 01:37:47 PM

Sun Worshiping Dog Launcher: These jackasses have painted themselves in an even smaller corner than usual with this. They have to scare the holdouts on the bond deal into line with reports like this, but don't seem to understand that some of the holdouts are never going to accept the deal.


Am i right in thinking that the bondholders are in a position similar to the prisoners' dilemma?
 
2012-03-06 01:45:52 PM

AcademGreen: Fist they manipulated and then bet against the homeowners.

Then they manipulated and bet against the banks.

Now they manipulate and bet against the countries.

Modern finance will be more destructive than a war before it is over.


Finance has ALWAYS been a tool of war.
Countries/banks are ALWAYS lending money/arms to other countries so that those countries can make war. or to the rebels. or freedom fighters/terrorists.
 
2012-03-06 01:48:51 PM
If I was a billionaire, I might be interested in a Greek island.

How much for the island of Lesbos?
 
2012-03-06 01:48:57 PM
By contrast, the entirety of Greek debt is about €350 billion. They could just pay the whole damn thing off and have money left over.
 
2012-03-06 01:59:51 PM

Bad_Seed: By contrast, the entirety of Greek debt is about €350 billion. They could just pay the whole damn thing off and have money left over.


except the greektards have already said that they will just get into trouble again and refuse to change anything to stop over spending
bwhahahaha

if it were only so easy
 
2012-03-06 02:15:00 PM

namatad: ummmm
but if you just kick greece out of the euro and stop using any more cash to bail greece, doesnt that free up TONS of cash to bail out italy, spain, portugal and ireland?

hmmmmmmmmmmmmmmmmmmmmmmmmm
how about one bailout per country?
kick them out when they come back for a second one?
TADA

problem solved
LOL


Not sure if serious. The other euro banks that financed Greek debt would lose their investment if Greece defaults or leaves the euro. A few weeks ago there was an article that showed what banks had how much tied up in Greece bonds. That gives an immediate picture of what would happen, the ripple effects would be pretty nasty.
 
2012-03-06 02:41:47 PM

namatad: Bad_Seed: By contrast, the entirety of Greek debt is about €350 billion. They could just pay the whole damn thing off and have money left over.

except the greektards have already said that they will just get into trouble again and refuse to change anything to stop over spending
bwhahahaha

if it were only so easy


So what? For that kind of money you can eliminate Greek debt three times over. Even if, afterwards the Greeks decide to run a 10% budget deficit every single year, it will take a decade before they need another bail out. If Greece were a bank they would have been bailed out a year ago and by now we would have been focusing on how to rebuild a sustainable economy, instead of trying to extract more pounds of flesh.
 
2012-03-06 02:42:16 PM

AcademGreen: Fist they manipulated and then bet against the homeowners.

Then they manipulated and bet against the banks.

Now they manipulate and bet against the countries.

Modern finance will be more destructive than a war before it is over.




Their business model:

1. Package together a bunch of securities in a way that they are bound to fail.
2. Take out insurance (CDS) on those securities.
3. When they fail, collect the insurance money and claim ignorance.


Its the equivalent of taking out insurance on your neighbor's house, setting their house on fire, and then collecting the insurance money. Legal? Yes. Ethical? No. Should it be legal? No.
 
2012-03-06 03:19:12 PM

Brontes: namatad: ummmm
but if you just kick greece out of the euro and stop using any more cash to bail greece, doesnt that free up TONS of cash to bail out italy, spain, portugal and ireland?

hmmmmmmmmmmmmmmmmmmmmmmmmm
how about one bailout per country?
kick them out when they come back for a second one?
TADA

problem solved
LOL

Not sure if serious. The other euro banks that financed Greek debt would lose their investment if Greece defaults or leaves the euro. A few weeks ago there was an article that showed what banks had how much tied up in Greece bonds. That gives an immediate picture of what would happen, the ripple effects would be pretty nasty.


yah
the serious answer is never let the banks lend that much money to one country, not without collateral.
seriously. make the banks who lend that much money to countries book the loan as risky. sucks to be the country borrowing the money, but to what end does society pay for the banks being gamblers.

plus time to stop using the big 3 rating services. FFS they are a bunch of crooks.
 
2012-03-06 03:28:04 PM
did they bribe their way into the EU? How the fark did they get in?
 
2012-03-06 03:37:57 PM

AcademGreen: Fist they manipulated and then bet against the homeowners.

Then they manipulated and bet against the banks.

Now they manipulate and bet against the countries.

Modern finance will be more destructive than a war before it is over.


I think you could make a case that it already has been.

Bonus question: Who has done the most damage to America in the time period 2000 - 2010? A) Al Qaeda B) The Taliban C) Goldman Sachs

Show your working.
 
2012-03-06 04:20:11 PM

GroverCleveland: did they bribe their way into the EU? How the fark did they get in?


Well, you see, there was a war a little while back and during that war Greece was invaded by Germany (technically they were invaded by Italy, but the Italians were getting their arses kicked so the Germans had to come down and finish the job). Now, while a substantial proportion of the Greek elite were quite sympathetic to Fascism and didn't mind their new masters, the majority of the population held strong Communist sympathies and were resolutely against it. So they organised themselves into various Communist dominated resistance groups who made life quite difficult for their German occupiers (they were far more effective than the French resistance movement, also, incidentally dominated by Communists). Near the end of the war the Germans were withdrawing from Greece to fight the advancing Soviets, allowing the various resistance groups to effectively take control. Mean while the Allied leaders were meeting with each other to decide how post-war Europe should be run. It was decided the Stalin would control the eastern half of the continent, except Greece. You see, people like Churchill were big neo-classicists who had a hard-on for ancient Greek culture and hated the idea of modern Greece falling under Communist rule. Stalin didn't mind because he got pretty much everything he wanted anyway.

Now, while pretty much all the other Eastern European countries didn't want Communism or Soviet rule and bitterly complained that the Western allies had sold them out to Stalin, the situation in Greece was rather different. The Communists enjoyed huge popularity and they dominated the resistance movement. They now started fighting with the right-wing resistance factions in what became the Greek Civil war, and because they were larger and better organised the Communist side quickly stated winning. Not wanting to see all their hard work and secret deals go down the drain, first Britain and then America invaded Greece to provide assistance to the right.

The right-wingers won the war, Greece joined NATO and the western sphere of influence and a harsh, anti-Communist security apparatus was set up to prevent any further "trouble". Several years of political instability followed until in a right-wing coup in 1967. The coup leaders set up a military dictatorship with all the trimmings, murder, torture, etc and with American support which lasted until 1974 when it was overthrown by a popular protests.

In order to stop the Greek situation from becoming too unstable again and to prevent the Greeks from getting all Communisty, the EU decided to offer them membership, which included giving the Greeks lots of money. So, yeah you could say that there was bribery, but it was mostly the EU bribing the Greeks and not the other way around.
 
2012-03-06 04:48:20 PM
Athens turned up the heat on its creditors on Tuesday as it sought to secure a bond swap that will cut its mountainous debt, while the main bondholders group warned a disorderly default would cause more than a trillion euros of damage to the euro zone.

The world's largest game of Liar's Poker begins.
 
2012-03-06 05:07:42 PM
Ok, I had read somewhere that the major holders of Greek debt were mostly large banks and financial firms that are members of the International Swaps Derivatives Association. This being the case, an agreement amongst the bond holders was assured since this group had already written off the amount, and insisted that there will be no technical default (fearing that a real-live disorderly default would lead to the same thing in Spain, Italy etc.)

Can someone who knows more about this that I do explain what is really going on? I don't really blame the hold-outs. Why would you want to voluntarily take the haircut when a CDS would probably pay much better in the event of a default? But if the majority of the holders of that debt are also the ones who would have to pay out if a CDS event was triggered...
 
2012-03-06 05:15:16 PM

Bad_Seed: GroverCleveland: did they bribe their way into the EU? How the fark did they get in?

Well, you see, there was a war a little while back and during that war Greece was ...


Wow, thanks for the post and the history lesson. From what I've read, entrance is not a given and it comes with some strict requirements.

Requirements which I'm surprised Greece would ever meet. Based on your post, sounds like my assumption was more or less spot on.
 
2012-03-06 05:20:04 PM

GroverCleveland: did they bribe their way into the EU? How the fark did they get in?


Goldman Sachs came over and cooked their books. They did all kinds of Enron-style accounting tricks to do this. For example, booking future year's tax receipts as current income.

It would be like if, lets say you make $50k a year. And to qualify for a loan, you filled out the paperwork saying you actually made $200,000 this year (counting what you will make this year, and next year, and the year afterwards and the year after that). This is basically one of the 3-card monty games that Goldman Sachs pulled to get Greece (and others) into the EU.

Hey everyone, I'm a millionaire*!

*if you total what I will make over the next 10 years!
 
2012-03-06 06:04:56 PM

GroverCleveland: did they bribe their way into the EU? How the fark did they get in?


Why wouldn't they get in? It's not like the EU rules were ever followed in the first place.
 
2012-03-06 06:20:10 PM

Goodfella: GroverCleveland: did they bribe their way into the EU? How the fark did they get in?

Goldman Sachs came over and cooked their books. They did all kinds of Enron-style accounting tricks to do this. For example, booking future year's tax receipts as current income.

It would be like if, lets say you make $50k a year. And to qualify for a loan, you filled out the paperwork saying you actually made $200,000 this year (counting what you will make this year, and next year, and the year afterwards and the year after that). This is basically one of the 3-card monty games that Goldman Sachs pulled to get Greece (and others) into the EU.

Hey everyone, I'm a millionaire*!

*if you total what I will make over the next 10 years!


Sounds like they should just nullify the marriage ... er addmittance
 
2012-03-06 06:22:24 PM

MrEricSir: GroverCleveland: did they bribe their way into the EU? How the fark did they get in?

Why wouldn't they get in? It's not like the EU rules were ever followed in the first place.


well, there must be some standards. Turkey is not just waltzing in. And while I am not an expert on turkey the country, I am an expert in the bird and it is DELICIOUS
 
2012-03-06 06:27:02 PM
I've been watching youtube vids of the riots in Greece and I find them pretty interesting to watch. The passion with which these people throw gasoline lit on fire into the middle of a group of cops.

I don't think I'm that passionate about anything .. but then I'm not greek
 
2012-03-06 06:37:11 PM

GroverCleveland: I've been watching youtube vids of the riots in Greece and I find them pretty interesting to watch. The passion with which these people throw gasoline lit on fire into the middle of a group of cops.

I don't think I'm that passionate about anything .. but then I'm not greek


If you worked the past 2 years for IOUs and now you suddenly found you would never get paid AND your retirement was completely gone, I think you'd start feeling passion very rapidly.
 
2012-03-06 06:40:19 PM

MrEricSir: GroverCleveland: I've been watching youtube vids of the riots in Greece and I find them pretty interesting to watch. The passion with which these people throw gasoline lit on fire into the middle of a group of cops.

I don't think I'm that passionate about anything .. but then I'm not greek

If you worked the past 2 years for IOUs and now you suddenly found you would never get paid AND your retirement was completely gone, I think you'd start feeling passion very rapidly.


yep, i'm certain that's the case. i just happen to have a couple of friends of greek heritage and with those fellas, a discussion of white vs wheat bread could escalate into a full blown argument pretty quickly
 
2012-03-06 09:05:40 PM

engrishmajor: Ok, I had read somewhere that the major holders of Greek debt were mostly large banks and financial firms that are members of the International Swaps Derivatives Association. This being the case, an agreement amongst the bond holders was assured since this group had already written off the amount, and insisted that there will be no technical default (fearing that a real-live disorderly default would lead to the same thing in Spain, Italy etc.)

Can someone who knows more about this that I do explain what is really going on? I don't really blame the hold-outs. Why would you want to voluntarily take the haircut when a CDS would probably pay much better in the event of a default? But if the majority of the holders of that debt are also the ones who would have to pay out if a CDS event was triggered...


Yeah, well, what you read was *possibly* bullshiat. Greece, Europe and whoever else is playing this little game of theirs is lying repeatedly about everything. I know that probably is not a concise answer, and it doesn't even make sense to lie at this point, but it appears to be all they know how to do. In short, there are bond holders out there who are not going to agree to this little deal. The real question is how many are there and how organized are they? I know at least some of them have organized with a law firm to block the bond deal. The catch is whether or not Greece has enough of the bond holders on board to avoid activating the CACs. They probably do not. I think they need 90% for that, and they flat don't have it. Maybe its 75%, I can't remember all the numbers. Anyway, they'll probably have to trigger the CACs. This is bad in that unlike last week, the CDSs will need to be paid out if Greece goes about coercing their creditors to join. My understanding is that if the CDSs go off, then you're looking at a default, and probably a disorderly one.

Now, the other question is if the ISDA decides the CDSs need to be paid out. Last week when Greece went into selective default, they said that didn't count. That pissed some people off, because this whole thing is feeling alot like Calvinball by now. The ISDA is made up of major banks, and they stand to lose most likely if the CDSs are triggered. The problem gets uglier though because if they see the CACs activated, and then still refuse on the CDSs, you will see a massive crisis in the CDS market develop. What is the point of owning insurance against a default if the insurance company refuses to pay out? The CDS market will fail, and much, much worse is that bond holders in other European countries will panic as well because the fundamental rules of the bond/CDS/debt market will be broken at that point. Portugal, Spain, Italy, Ireland, and hell, maybe France too will see a bloodbath in their bond markets because now all of the CDS contracts are basically worthless because it turns out the ISDA is not going to pay jack shiat on anything.

In short, if enough bond holders hold out, the CACs will be activated, a credit even will occur, and the ISDA is faced with an ugly decision: activate the CDS and pay through the nose, or don't and then watch as the European bond market devolves into the financial equivalent of Mad Max 2. Those minority bond holders are counting on the CDS trigger. The catch is if there are enough of them to force it. There probably are.

The first sign of problems you'll see if a delay in the PSI deal set for Thursday night. If Greece/the EU pull their standard bullshiat about needing to delay things a bit to get everyone on board, Friday is going to be a frigging nuts in the markets.

Honestly, my best bet is that they delay, then get everyone to sign on, but they'll use the CACs to do it anyway (I know, why delay when the outcome is the same, but hey, its Greece). The ISDA part I can't predict. I'd say it is 50/50 that they say a credit event triggered. If they say it did not, then we'll probably have a quick lull (days, a week or two?) before shiat gets real. If they do say the CDS was triggered, then shiat gets real immediately.

If, by some miracle, Greece does get enough folks on board without the CAC, then we'll totter along, the market will improve, and things will go to hell at a later date.
 
2012-03-07 04:35:57 AM

sasbazooka: So what, that's like, $2 USD or something right? I can skip my latte one morning to keep getting Gyros for lunch.

/I keed.


That had a chance at being funny if the dollar was stronger than the Euro. It's more like Europe could pay off America's national debt with a few hundred Euros and a half off Pizza Hut coupon.
 
2012-03-07 02:41:31 PM

GroverCleveland: did they bribe their way into the EU? How the fark did they get in?


they lied about their finances

Link (new window)
 
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